By Mark McSherry
The European Commission said it has fined Apple over €1.8 billion “for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (iOS users) through its App Store.”
In particular, the Commission said it found that Apple “applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services available outside of the app ‘anti-steering provisions).”
This is illegal under EU antitrust rules.
The Commission charged Apple last year with preventing Swedish streaming service Spotify and others from informing users of payment options outside its App Store, following a 2019 complaint by Spotify.
European Commission executive vice-president in charge of competition policy Margrethe Vestager said: “For a decade, Apple abused its dominant position in the market for the distribution of music streaming apps through the App Store.
“They did so by restricting developers from informing consumers about alternative, cheaper music services available outside of the Apple ecosystem.
“This is illegal under EU antitrust rules, so today we have fined Apple over €1.8 billion.”
Reuters reported that Apple said it would appeal the decision. A ruling at the Luxembourg-based General Court is likely to take several years. Until then, Apple will have to pay the fine and comply with the EU order.
Apple criticised the Commission’s decision, saying in a statement it “was reached despite the Commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast”.
Apple said: “The primary advocate for this decision — and the biggest beneficiary — is Spotify, a company based in Stockholm, Sweden.
“Spotify has the largest music streaming app in the world, and has met with the European Commission more than 65 times during this investigation.”
Spotify said: “… while we are pleased that this case delivers some justice, it does not solve Apple’s bad behaviour towards developers beyond music streaming in other markets around the world.”
Analyst Ryan Reith at tech and services company IDC told Reuters: “I believe this is another step in the on-going process of breaking down some of the walled gardens that Apple has created around its ecosystem.”
The Commission added: “Apple’s conduct, which lasted for almost ten years, may have led many iOS users to pay significantly higher prices for music streaming subscriptions because of the high commission fee imposed by Apple on developers and passed on to consumers in the form of higher subscription prices for the same service on the Apple App Store.
“Moreover, Apple’s anti-steering provisions led to non-monetary harm in the form of a degraded user experience: iOS users either had to engage in a cumbersome search before they found their way to relevant offers outside the app, or they never subscribed to any service because they did not find the right one on their own.”